Texas Law on Debt Repayment After Death

When a person dies, their money and property will go towards repaying their debt. If there’s no money in their estate, the debts will usually go unpaid.

According to Texas Law Help, death doesn't necessarily clear a person's debt. Even after someone's demise, debt collectors can try to collect a payment from a decedent’s estate or, in some cases, from someone who received money from the estate.

According to Texas law, most debts have a four-year statute of limitations. The period begins on the date of default or the last payment made, whichever is more recent.

Debt generally does not disappear until it is paid. However, laws limit how long creditors or debt collectors can take legal action to recover a debt.

These limits, known as statutes of limitations, are designed to prevent lawsuits over older debts. Some debts — such as federal student loans — are not subject to these time limits.

According to the Consumer Financial Protection Bureau, if a debt collector sues you after the statute of limitations has expired, you may be able to use that as a defense in court. You might also have grounds to take action against the collector under the Fair Debt Collection Practices Act, which prohibits suing or threatening to sue over time-barred debts.

According to J.G. Wentworth, the statute of limitations may begin:

• On the date of your first missed payment (default).
• On the date your debt was charged off by the original creditor.
• On the date of your most recent payment.

The statute of limitations can restart if you:

• Make a payment, even a small one.
• Acknowledge the debt in writing.
• Enter into a payment plan.
• Make a written promise to pay the debt.

According to the Consumer Financial Protection Bureau, if you’re a surviving spouse or serve as the personal representative, executor, or administrator of an estate, debt collectors may reach out to you about the deceased person’s debts and potential payment from the estate.

However, they cannot claim or suggest that you are personally responsible for paying those debts with your own money.

You may be responsible for a debt if:

• You’re a co-signer on a loan with outstanding debt.
• You’re a joint account holder on a credit card.
• You’re a surviving spouse and state law requires spouses to pay certain debts
• You’re the executor or administrator and state law requires payment from jointly owned property
• You’re a surviving spouse and you live in a community property state that requires surviving spouses to use jointly-held property to pay debts of a deceased spouse. These states include Alaska (if a special agreement is signed), Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.